More people than ever living paycheque to paycheque in BC

VANCOUVER (NEWS 1130) – The ever-increasing cost of living is behind new numbers suggesting over half of British Columbians are spending all of — or even more than — what they get paid.

A survey from the Canadian Payroll Association finds almost six-in-10 employees in BC are living paycheque-to-paycheque, indicating they would have trouble meeting their financial obligations if their salary was delayed by even a week.

“It’s gone up from last year to 59 per cent, the highest in Canada,” says the CPA’s Sandra Morrison. “Basically, one in four employees could not come up with $2,000 within a month in the event of an emergency.”

The survey also finds debt levels for working Canadians remain high.

Over one-third (35%) of working Canadians and 42% of BC employees feel overwhelmed by their level of debt.

“For BC in particular, as well as across Canada, for the first time in our survey history, mortgages have surpassed credit cards (as the most difficult debt to pay down),” Morrison tells NEWS 1130.

“Because people are spending more than their paycheques — 49 per cent in BC spend all of more than their net pay — they are creating high levels of debt, and 12 per cent feel that they will never be debt-free.”

Forty-two per cent of survey respondents (and 46% in B.C.) said they save five per cent or less of their earnings, well below what is generally recommended by financial planning experts.

“We are encouraging people to save at least 10 per cent of their paycheques through the payroll deduction option at their work because that 10 per cent is key to the retirement nest egg that BC employees need to retire. Forty-eight per cent of BC employees find that they will need at least one million dollars to retire,” says Morrison.

The average Canadian’s target retirement age is now about 61.

Canada-wide, the survey highlights a few positive indicators, most notably a five per cent increase in the number of employees with total household incomes of over $125K, and a slight rise (2%) in full time employment to 89 per cent.

However, most working Canadians see little to cheer about, with only 39 per cent expecting the economy in their city or town to improve. While up three per cent over last year, it is down by 27 per cent from the first survey done in 2009.

British Columbians are optimistic about their local economy, with 44 per cent believing it will improve.

 

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